America is supposed to be the land of the free and the home of the brave.
However, as we continue to get bogged down in our many problems, I unfortunately see a mentality in which we are becoming more and more a nation of the unfree – the victims – and timid when it comes to approaching these challenges.
Ohio Republican Senator Rob Portman wrote a column this week highlighting the latest dire forecasts from the Congressional Budget Office.
CBO predicts the nation is sinking deeper into an ocean of red ink.
The senator notes that assuming the business-as-usual scenario, we will be indebted for another $10 trillion over the next decade and another $100 trillion over the next two decades.
On the spending side, “after averaging 20 percent of the economy over the past 50 years, spending is projected to rise to 23 percent, 29 percent and then 34 percent of the economy over the next three decades…”
At the heart of the problem, the senator continues, fueling the Titanic’s out-of-control fiscal spending and borrowing are entitlements – “Social Security, health entitlements and the resulting interest costs on the growing national debt.”
This is the time to act. But we take no action, and the proposals we hear rather epitomize the land of the unfree and the home of the timid.
When Social Security was introduced in the 1930s, it seemed like a good idea. Everyone working would pay a compact tax, and this income could be used to pay retirement severance pay to retirees.
But 45 Americans worked for every retiree. Due to longer life expectancies and shrinking families, this ratio has now fallen to three to one.
This prevents the system from working. CBO projects that in 20 years there will be no funds to pay one third of retirees’ benefits.
Senator Portman’s proposals include raising the retirement age and the means test – i.e. reducing benefits for people with higher incomes.
But why in the land of the free would the government tell us when we can retire? And if the wealthier pay taxes but don’t collect benefits, Social Security becomes just another massive national welfare program.
I have long been a supporter of changing the entire system and transforming ZUS into a retirement savings program. Instead of paying tax and receiving government benefits in the future, let everyone invest these funds in their own personal retirement account.
My organization CURE is currently pitching an idea that would facilitate move toward these types of reforms. We call this the 30/30 plan.
Give every working American age 30 or younger who earns $30,000 a year or less the opportunity to stop paying payroll taxes and exploit all of those funds to invest in a personal retirement account.
Not only would it begin to fix the hopelessly broken Social Security system, but it would also begin to build a society of ownership in the parts of our country where the welfare state has done and continues to do the most harm – among low-income Americans.
The stock market is rising today, but low-income earners benefit little. According to a Pew Research survey, 80 percent of households earning $75,000 a year or more own stocks, but only 15 percent of households earning $30,000 or less do so.
The average retirement account savings for white households is $115,990. For black households, it’s $17,620.
The 30/30 Plan begins to solve our Social Security crisis and begins to build ownership and wealth in low-income households.
It is time to return to the first principles of our free society, re-embrace these principles, and move forward with courage and faith.
The 30/30 plan is an approach worthy of the land of the free and the home of the brave.
